GCI to TGNA Spinoff Instructions

On June 29, 2015 Gannett Co., Inc. (NYSE: GCI) completed a previously announced spin-off transaction, creating a new stand alone company, TEGNA Inc. (NYSE: TGNA).  Always defer to the Investor Information releases for any and all corporate action information or consult a tax advisor if there are questions regarding the cost basis.  We have outlined our best practice entry into Schwab Portfolio Center below.

Preparation:

If you have posted through transactions from custodians to reconcile placeholders while waiting for information, make sure to un-post the following types of transactions related to GCI or TGNA:

• Credits
• Debits
• Sales for either security (be sure to notate which is which with a screenshot, you will need this later)
• Transfers for either security (also be sure to notate which is which with a screenshot)
• ROP
• Incomes related to the Cash in Lieu or cash payouts (if any)

Common Transactions Associated with the Custodian Corporate Action

• Schwab – Unpost and block:
  • Credits of Securities
  • Debits of Securities
  • Journals for cash payout
  • Journals for Cash in Lieu
  • Deposits for Cash in Lieu and/or Cash payouts
• Fidelity – Unpost and block
  • Splits
  • Credits of Securities
  • ROP
• Pershing – Unpost and block:
  • Credits of Securities
  • Debits of Securities
  • Journals for cash payout
  • Journals for Cash in Lieu
  • Deposits for Cash in Lieu and/or Cash payouts
• TDAmeritrade – Unpost and block:
  • Credits of Securities
  • Journals for cash payout
  • Journals for Cash in Lieu
  • Deposits for Cash in Lieu and/or Cash payouts

Merging GCI & TGNA Symbols

• Make sure that TGNA (TEGNA Inc) is added to the system, either manually, or via the interface new security file.
• Go to the Securities Tab
• Search for GCI. If this symbol exists, it will need to be merged to TGNA
• Search for TGNA and highlight the symbol
• Click on the Combine button on the bottom right hand side of the screen
• Type in GCI into the open field and make sure TGNA will be the final security
• Click OK

• After the combination of the two symbols, add GCI again to Portfolio Center so there is again a GCI and TGNA separate security record

• Manually add the pricing history for the GCI security from 6/29/15 forward
  • You can use Yahoo Finance for historical pricing
  • http://finance.yahoo.com/q/hp?s=GCI+Historical+Prices
• Click on Go to Price History
• Click on New
• Add the date and the price
• Click OK

• Close the security details when complete

Reasoning for Symbol Combination:

The reason we are doing this is to be able to spinoff the GCI security from TGNA. If the GCI security exists in the database, the spinoff and dissection of the cost basis cannot occur properly using the Spinoff wizard based on details released by the companies. Normally a spinoff of TGNA would not require the combination of the two original securities, however in this instance, the spinoff has to start backwards.

Reconnecting the Security Path

• Click on the Interface tab
• Highlight the interface the spinoff is coming through (if there are multiple custodians affected, you will need to do this for each custodian)
• Right Click and choose Settings
• Click on the Paths and Assignments tab
• Choose Security Codes

• Search for GCI (CTRL+F)
• Change the PC symbol from TGNA to GCI by clicking on the triple dot button and searching for the new GCI security entered into the system
• Click OK
• Click OK again and close the Settings box

NOTE: Now that the new GCI security was added after merging the old one with TGNA, it needed to be linked to the custodian symbol sent down so that pricing will be posted to the correct security going forward. Leaving this link unchanged means that pricing for GCI would continue to post to the TGNA record and cause posting price conflicts.

Spinoff Wizard Instructions

• Go to the Transaction Writer
• Click on New
• Enter the following details in the Transaction List Information
• Click Save

• Click on the wizard button and choose Spin-Off wizard, then click OK

• Enter the information for the original security TGNA then click Next

• Enter the information for the new security, GCI (the new addition)

• Click next and run on All Portfolios
• Click Finish
• The following transaction types should show up:
  • Credit of Securities – TGNA – This transaction will come back in with adjusted basis
  • Credit of Securities – GCI
  • Debit of Securities – TGNA
  • Sells – if any appear for fractional shares (which may or may not generate), block them. You will use the interface transactions to remove any fractional shares.
• Post the Debits FIRST
  • The reason they must be posted first is so that the full position of TGNA is removed. This will transfer out all trade lots and flatten the position. Once the credit comes back in, it will bring the quantity back and the adjusted down cost basis for each trade lot that originally occurred.
  • If we try to post the credits first or allow the system to post without bias (it does not properly post in order), the new credit could be part of the debit’s removal of security quantity and cost basis. The new credit(s) are trade lots and we do not want the debit (which is meant to be used as an adjustment transaction) to use this new trade lots’ information in this corporate action.
• Close the list once the debits are posted and click Post List

NOTE: The total market value of the TGNA debit should equal the total market value of the combined credits for ALL securities. This is to prevent the Transfer section from showing up on the Performance Reports in portfolio Center which are representative of non-traditional accounting flows (journals, debits, credits, trades to NONE). We don’t want this extra section showing up, so it’s imperative to use the wizards to wash the values of in and out transactions

Re-Reconciling the Interface

• Right click and delete the Interface Reconciliation Reports for each custodian affected**
• Re-run the reports so you can see fractional shares and any other items that need to be re-posted
• Re-post any sales or transfers that occurred.
  • Be sure to use your screenshots two note which transactions belong to GCI and TGNA. Once you merged GCI with TGNA the first time, the transactions that came through prior to making security detail changes and re-linking paths will pick up TGNA for all GCI trades that occurred.
• For any Journals, ROP, Deposits or Income that came in for Cash in Lieu of fractional shares, change them to one of the following:
  • Income (Payment in lieu of Dividend) – this should be used in the event there are no fractional shares to sell
    • Edit the transaction (CTRL+E)
    • Security Type: Equities
    • Activity Type: Income
    • Income Amount: Should auto populate
    • Change to: Payment in lieu of Dividend
    • Normal Income: No
    • Account ID: CASH
  • Sale – this should be used in the event there are fractional shares to sell. Change the transaction types to an Equity – Sale and remove fractional shares.
    • Edit the transaction (CTRL+E)
    • Security Type: Equities
    • Activity Type: Sell
    • Quantity: Fractional Share Amount (CTRL+# for balance)
    • Account ID: CASH
  • Once the cash in lieu has been updated, sales and transfers have been re-posted, re-run the reconciliation report to make sure that all data is fully reconciled.

**NOTE: The reason that the reconciliation report needs to be deleted is because we have changed the linking of the GCI and TGNA securities in the paths and assignments of the interface. When the symbols were merged, the link between symbols changed the data and only recognized TGNA as the final security. Once the GCI symbol was re-directed to its correct ticker to post pricing data, it altered the linking that the reconciliation report originally used for verification. By deleting the file you are refreshing the link that verifies share quantities.